Financial Panther

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Debt

Pay Off Your Student Loans Now – It Doesn’t Get Any Easier Later

Last Updated on 28 Comments
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I recently realized that I’m turning 30 in a few weeks. As I was reflecting on entering my 30s and the things I’ve achieved, one thing occurred to me – I must be in the minority of recent lawyers that will be entering their 30s with absolutely no student loan debt remaining.

This is sort of interesting when you think about it. Student loans have become so normalized in our society that we just expect everyone to have them now. This is especially true for most high income professions that require many years of post-college schooling. When you include all the time spent accruing debt in grad school, it’s not uncommon for someone to keep their debt around for a decade or more. A lawyer graduating at age 25 could easily still have their student loan debt kicking around until they’re 35 or older. I know of dentists that will be paying their student loans well into their 50s!

A common refrain is that you’ll pay more on your student loans sometime in the future…

Why I Prefer To Pay Off Debt Aggressively

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Anyone with debt and a decent cash flow will eventually find themselves with a choice. What should be done with all of that excess money? Assuming your goal isn’t to spend it all on buying things, you’re basically left with two choices. Pay off your debt aggressively. Or invest the surplus.

The pure mathematical answer is to play the interest rate arbitrage game. Excess money should go into assets that provide a rate of return higher than whatever interest rate your debt is at. It’s a pretty simple calculation from that vantage point…

Do You Know How Much Your Debt Costs You Per Day?

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One of the things that surprised me when I began my student loan payback journey was how much interest I had to pay when I started making my payments. What was even more surprising to me was how much interest my loans had accrued while I was in school (and making no money). In fact, when I graduated and made my first student loan payment, it didn’t even reduce my student loan balance at all. All of it went directly towards the interest!

Interest is one of those things that we all sort of understand in theory. Most of us basically know that when we borrow money, we agree to pay it back at some point, with a little extra on top. But I don’t think we’re very good at really understanding what interest looks like on a daily basis. Maybe that’s why we sometimes let debt linger in our lives…

The Only Secret To Paying Off Debt Is To Be A Weirdo

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One of the things I always tell people about debt is that there isn’t any secret to paying it off quickly. There’s no magic method that will make your debt disappear. No secret tricks that will crush your loans any faster. And you probably shouldn’t count on someone else paying your debt off for you.

In the end, paying off debt really just comes down to a single basic principle. Live on less than you earn and use what’s left over to pay off your debt. The more you have left over to pay towards your debt, the faster it’ll be gone. It’s basically that simple…

A Breakdown Of How I Paid Off $87,000 Worth Of Student Loans In 2.5 Years

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One of the best things I did coming out of law school was to pay off my student loans as fast as I could. Doing this gave me a ton of flexibility in the type of money I had to earn. With my loans gone, I didn’t need to work in a job earning a certain amount of money, all so that a portion of it could go out the door to some student loan company. And I could rest easy at night knowing that I didn’t have to keep paying for a piece of paper that I had earned years ago!

Interestingly, even though I knew how much in student loans I had paid off, I had never actually looked at what I had paid over those 2.5 years.

I thought it might be an interesting trip down memory lane to see this information. So a few weeks ago, I requested my payment history from my student loan servicing companies and took a look.

Pay Off Debt By Rejecting The “It Isn’t Possible” Mentality

Last Updated on 36 Comments
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One of the interesting things I find when people share their debt free stories with the mainstream media are the comments that result. Some commenters praise these articles and talk about how they’ve been inspired.

But more often, you notice the negative comments. These are the people who say that the story being shared isn’t possible or that what they’re reading isn’t helpful because most people can’t do the same thing…

Why Your Average Lawyer Can’t Pay Their Student Loans

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I usually get praise for the fact that I was able to pay off $87,000 in student loans in 2.5 years. It’s definitely one of my proudest money moves and, importantly, it opened up a lot of doors for me. Not being forced to stay in any particular job because I “needed” the income greatly improved my quality of life.

But sometimes when I share my story, rather than praise, I’m met with scoffs.

Of course you were able to pay off your student loans quickly! You’re a big shot lawyer making six figures a year!

But these scoffs got me thinking. The assumption appeared to be that anyone in my position could do what I did.

So, if I was able to pay off my student loans off as fast as I did, why weren’t others in my position doing the same?

Getting On The Same Financial Page Before Marriage

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Yours truly got out of debt in June 2016. This month, I didn’t have to pay a student loan bill for the first time in over 2 years and I’ll tell you, it felt weird. But it’s such an amazing feeling.

So here’s what’s crazy. I just got out of debt. And I’m going to be going right back into debt again. You see, Ms. Financial Panther and I are getting married next year and she has $130k in student loan debt. Ouch! What’s yours is mine though, right?

I’m not worried however. We’re both pretty smart (I think), work in high earning professions, and expect to make a very good household income…

If You Are Young And Have A High Income: Treat It As A Windfall

Last Updated on 16 Comments
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By almost any measure, I had hit the jackpot. I graduated from law school in 2013, with honors, and landed a job at one of the largest law firms in the midwest. In an era when law students were – and still are – frequently finding themselves unemployed or underemployed, I was one of the “lucky” ones. My starting salary in my first ever real job was $110,000 per year. Here I was, a 26 year old kid making a salary that my middle class parents had never earned in their entire lives. The most I had ever earned in a year before was about $20,000.

According to the Bureau of Labor Statistics, the average salary for 25-34 year olds in the United States is $38,324 a year. I was making nearly 3 times that amount. By 2016, my salary rose to $125,000 per year. I was a baller!

But, like almost all new lawyers (or almost anyone entering a high paying professional field), I also had sizable student loan debt: about $87,000 worth.

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